Lawn Bowling

Lawn bowling is a wonderful pastime.  In California, the weather is generally nice enough to play outdoors, but there are parts of the nation (and the globe for that matter) which offer indoor greens.  It’s leisurely but provides something for those with a competitive spirit as well.  In short, the goal is to roll your asymmetric bowl down the green toward the jack (a white ball thrown before each end—i.e., inning—which sets a unique target every time) and getting closer than your competitor’s bowl.

Like an end in lawn bowling, each business cycle gives America’s central bank a unique mark to achieve.  In response to the economic shutdown, they created a jack of sorts (employment in this case) to help determine the efficacy of their monetary policies.  After over 20 million Americans lost their jobs, the Federal Reserve is trying to get the workforce back to pre-pandemic levels.  As of June’s employment report from the Bureau of Labor Statistics, there are still roughly 6.8 million jobs needed to fill the gap.

Greens for lawn bowling are manicured to look something like a large putting green in golf.  In theory the surface is smooth, but there are always imperfections which create contours, and moisture levels also impact how quickly (and therefore how far) a bowl will travel on its way to the jack.

Economic theory is often described with smooth curves.  Like the upward slopping supply curve (a straight line at a 45-degree angle) and the intersecting downward sloping demand curve (with the same angle in the opposite direction).  But it is never that simple.  The contours of the economy are rough and upcoming changes to it aren’t always obvious.  And while its not wet like moisture, liquidity preferences in the marketplace can disrupt the Fed from reaching the target it throws out for a given business cycle.  And like a bowl, outcomes are often asymmetric.